Laos Update: April 5, 2018

August 23-24, 2018: Laos Business Mission: Please save the date for the Council's annual Business Mission to Laos, taking place in Vientiane. Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

THE COUNCIL'S TAKE

Laos Increases Cooperation with GMS Countries on Rail Connectivity

Laos will be looking to increase its cooperation with Greater Mekong Subregion (GMS) countries. On March 19, Director General of the Planning and Cooperation Department Mr. Sengdarith Kattignasack stated during the GMS Association Board of Directors General Meeting that the Government’s goal is to transform Laos into a Transit Transport Service Provider within the region through land links. Laos is currently in discussions to draft a Framework Agreement for Cross-Border Railways. Laos is also currently developing a series of railways to achieve this goal. First is the 414 km Laos-China Railway, which will connect Vientiane to the Chinese border. The railway is 27% complete as of March 26, and is due to be complete by December 2, 2021. Second is the Lao-Thai Railway, which is currently in its second phase of construction.

There are also two future rail projects under consideration: one is the Vientiane-Thakhaek-Mugia-Tan Up-Vung Ang Railway Project, which will be 555 km long and will connect to the Singapore-Kunming Rail Link. The project has undergone a feasibility study and is currently being considered. The other project is the Savannakhet-Laobao Railway, which will run 220km from Savannakhet to the Chinese border and is currently in the feasibility study stage. Freight transport by railroad is considered one of the most efficient methods of transport, and since Laos conducts most of its trade via land routes, the construction of these railways will be a strong driver of its economic development.

Plans on Track for Commercial Development at Khonphapheng

Plans have been developed for a commercial development around the Khonphapheng Waterfall in Champassak Province, southern Laos. As of March 27, provincial officials have allocated 7,000 hectares for the development, but are waiting for a decision from the National Government to allot the full 9,000 hectares needed for the project. To accommodate the project, Champassak Provincial Authorities and the Guangdong Yellow River Industrial Group are currently setting up the Khonphapheng Special Economic Zone. Last year, the Guangdong Yellow River Industrial Group signed a memorandum of understanding with the Lao Government. In January, the Guangdong Yellow River Industrial Group submitted a plan to the Ministry of Planning and Investment, which included hotels, restaurants, tourism-related businesses and a shopping center for the development. The proposed project is estimated to cost approximately $10 billion and will be over an area of 9,000 hectares. If approved, the project will proceed in two phases. In the first phase, which would occur from 2018 to 2025, basic infrastructure such as water and electricity facilities would be built. In the second phase, an airport would be included to cater to visitors and business operators.

Champassak Province officials are concerned with how the project would displace current residents of the area. They stipulated that residents would have to be properly compensated for any loss of property and that they would be able to find living conditions comparable to those they had before their relocation. If completed, this development could lead to increased tourism in the province, stimulating economic growth in the area.

Laos’ Banana Exports Face Steep Tariffs in China

As of March 15, China has implemented inspection measures on banana imports from Laos that only allow bananas that meet strict criteria to be exported to China. These measures were implemented after Laos and China signed a protocol that determines inspection and quarantine measures for bananas that are exported from Laos to China. According to the protocol, bananas exported from Laos to China will be subject to the following standards:

The harvest time must be 10 to 12 weeks after flowering

Ripe bananas will not be permitted entry into China

Banana exports shall not include the rhizome, leaves, or soil during transportation.

Delivery must be made to the designated location according to Chinese regulations.

Laos is the second largest exporter of bananas to China. According to the Lao Ministry of Agriculture and Forestry, bananas are Laos’ largest agricultural export. In 2016, Laos exported 250,000 tons of bananas which amounted to USD$183 million. This number decreased (to an unspecified amount) in 2017 after the Lao government established strict regulations against banana farms due to pollution from large banana plantations. These developments have made the future of the banana industry in Laos uncertain and may result decreases of banana exports from Laos to China, and a depreciation in Laos’ economic growth due to exports.

PM Thongloun To Attend 3rd MRC Summit In CambodiaKPL: Lao News Agency 3rd Apr 2018
(KPL) Prime Minister Thongloun Sisoulith will visit Cambodia from Apr 4 to 5 to attend the 3rd Mekong River Commission (MRC) Summit to be held in Siem Riep on Apr 5. Prime Minister Thongloun’s visit is in response to an invitation from his Cambodian counterpart Hun Sen, according to the Press Department, Ministry of Foreign Affairs. PM Thongloun is also expected to hold bilateral talks with Vietnamese premier Nguyen Xuan Phuc and host Prime Minister Hun Sen.

Cambodia, Laos, VN Vow To Further Deepen Comprehensive CooperationKPL: Lao News Agency 2nd Apr 2018
(VNA/KPL) – The Prime Ministers of Cambodia, Laos and Vietnam (CLV) have reaffirmed their commitment to further deepening comprehensive cooperation among the three countries and building integrated, sustainable and prosperous CLV economies, an indispensable part of the ASEAN Community Vision 2025. The three PMs signed a Joint Declaration on the CLV Development Triangle Area cooperation at the end of the 10th CLV Summit in Hanoi on March 31.

China, Laos pledge to strive for more achievements in Lancang-Mekong CooperationXinhua 1st Apr 2018
HANOI, March 31 (Xinhua) -- China and Laos pledged here Saturday to strive for more achievements in the Lancang-Mekong Cooperation (LMC). The pledge was made at a meeting between Chinese State Councilor and Foreign Minister Wang Yi and Lao Prime Minister Thongloun Sisoulith. Wang said the Chinese and Lao leaders have reached important consensus on jointly building a community of shared future with strategic significance, charting the course for the future development of China-Laos relations.

Lao, Chinese businesses boost cooperation in trade and investment Vientiane Times 29th Mar 2018
Lao and Chinese enterprises have agreed to partner in various areas of trade and investment and to enhance relations between the two countries. A Memorandum of Understanding was signed in Vientiane yesterday during a meeting with Chinese business leaders led by the China-Asean Economic and Cultural Research Institute, Guangxi. Also present were representatives of Lao enterprises, business operators and government officials. The meeting took place at the Lao National Chamber of Commerce and Industry (LNCCI).

Prime Minister, Australian Counterpart Pledge Enhanced CooperationKPL: Lao News Agency 20th Mar 2018
(KPL) At a bilateral meeting held in Sydney, Australia, on Saturday, Prime Minister Thongloun Sisoulith and his Australian counterpart Malcolm Turnbullpledged to enhance cooperation in areas of agriculture, public works and transport, finance, human rights under bilateral and multilateral frameworks. The meeting between Prime Minister Thongloun and Australian Prime Minister was held in the sidelines of ASEAN-Australia Special Summit (Mar 17-18).

Asean planning to draw up occupational health guidelinesVientiane Times 20th Mar 2018
Asean member countries plan to create occupational health guidelines for industries by risk factor, to provide preventive measure recommendations for the health of workers in Laos and the region. Occupational health and safety is one of the most important issues for workers in Asean countries, and regional guidelines would allow the assessment and monitoring of workers’ health, a meeting in Vientiane heard yesterday.

Laos and Australia Strengthen Ties Amid ASEAN SummitThe Laotian Times 19th Mar 2018
Lao Prime Minister Thongloun Sisoulith and Australian Prime Minister Malcolm Turnbull held bilateral talks on Saturday, amid the ASEAN-Australia Special Summit, which was held in Sydney from March 17-18. The two premiers agreed to strengthen ties and cooperation between their two countries in a broad range of fields, including agriculture, public works and transport, finance, and human rights, according to the Lao Ministry of Foreign Affairs. Australia and Laos are parties to the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), which entered into force in Laos on January 1, 2011. Australia has provided duty free and quota-free access for Lao goods exported to Australia since 2003.

Laos, Cambodia Strengthen Cooperation On Labour, Social WelfareKPL: Lao News Agency 13th Mar 2018
(KPL) Minister of Labour and Social Welfare Khampheng Xaysompheng has signed with his Cambodian counterpart Vong Soth a Memorandum of Understanding on the cooperation between the Ministry of Labour and Social Welfare of Laos and the Ministry of Social Affairs, Veterans and Youth Rehabilitation of Cambodia. The signed MoU aims to enhance the cooperation, exchange of technical lessons and experiences, especially on labour, social security, social welfares between the two ministries.

National Affairs

Foreign Minister Receives Assistant Foreign Minister of KuwaitKPL: Lao News Agency 5th Apr 2018
(KPL) Foreign Minister Saleumxay Kommasith received on Mar 26 Assistant Foreign Minister of Kuwait Ali Sulaiman Al-Saeed in Vientiane as the latter was on a working visit to Laos to participate in a political meeting between the Ministries of Foreign Affairs of Laos and Kuwait in Vientiane from 25 to 27 March 2018. The host minister extended a warmly welcome to visiting Assistant Foreign Minister of Kuwait for his first visit to the Lao PDR.

Four new ambassadors appointed to overseas postsVientiane Times 4th Apr 2018
President Bounnhang Vorachit yesterday handed credentials to four diplomats who will become heads of missions in Australia, Brunei Darussalam, Kuwait, and Cuba. The diplomats are Mr Sisavath Inphachanh, Mr Phonethavy Boutdara, Mr Sisonxay Ngaovongsy, and Ms Anouphone Kittirath, who have been appointed as ambassadors to the Commonwealth of Australia, Brunei Darussalam, the State of Kuwait, and the Republic of Cuba respectively.

PM Reaffirms No Log Exports Can Be AllowedKPL: Lao News Agency 4th Apr 2018
(KPL) Prime Minister Thongloun Sisoulith ordered cabinet members, Vientiane Mayor, provincial governors and relevant sectors to continue implementing in a stringent manner Prime Minister’s Order No 15, attaching attention to sustainable protection of forest resources, not allowing log exports, monitoring and punishing violators of the order. At the first meeting between the government and provincial governors held on Mar 22-23 in Viengxay, Huaphan Province, cabinet members, Vientiane Mayor, and provincial governors noted that the implementation of Order No 15 especially its provisions on the reorganization of wood processing factory structure has made relatively good progress with 20 wood processing factories located in protection and protected areas closed and dismantled, as well as 1,186 sawmills.

PM stresses need for continuous development Vientiane Times 26th Mar 2018
Prime Minister Thongloun Sisoulith has stressed the need for government members, the Mayor of Vientiane, provincial governors and all government officials to maintain political stability and public security, saying this was essential for continued socio-economic development. Mr Thongloun made the call last week when addressing the government’s first open session in Viengxay district, Huaphan province.

Lao Leaders Commemorate Anniversary of Lao People's Revolutionary PartyThe Laotian Times 23rd Mar 2018
Party and government leaders, led by President Bounnhang Vorachi, laid a wreath at the Monument of Unknown Soldiers on the occasion of the 63rd anniversary of the Lao People’s Revolutionary Party, offering thanks and respect for the fearless revolutionary spirit of those who laid down their lives for the revolutionary cause. President Bounnhang and his delegation then visited the Kaysone Phomvihane Museum, offering a bouquet of flowers to honor Kaysone Phomvihane for his dedication in leading the revolutionary war, and bringing peace to the Lao multi-ethnic people.

PM Launches Made In Laos 2018 ExhibitionKPL: Lao News Agency 15th Mar 2018
(KPL) Prime Minister Thongloun Sisoulith opened yesterday Made in Laos Exhibition, the fifth of its kind, has brought more than 180 booths of a wide range of products made by entrepreneurs across the country. “The main objective of the Made in Laos 2018 Exhibition is to bring together innovative, unique and quality products made or assembled in Laos by local businesses or foreign investors using locally sourced materials or imported materials so that they can be showcased to possible buyers or sold,” said Vice President, Lao National Chamber of Commerce and Industry, Ms Chanthachone Vongxay.

Customs

Laos, Brunei extend length of reciprocal visa-free visitsVientiane Times 3rd Apr 2018
The governments of Laos and Brunei Darussalam have agreed that their citizens can stay in the other’s country for up to 30 days without having to obtain a visa. The agreement extends the visa-free stay from 14 to 30 days and is applicable to the holders of diplomatic, official and ordinary passports. The new ruling came into effect on March 30, the Lao Ministry of Foreign Affairs announced in a press statement.

Thai Vehicle And Accessory Import Reaches Over US$ 370 MlnKPL: Lao News Agency 20th Mar 2018
(KPL) The value of export of vehicles, auto parts and accessories from Thailand to Laos reached more than US$ 370 million, a press conference was told on Mar 15. The amount included US$343 million for the export of vehicles and US$ 37 million for the sales of automotive parts and accessories to Laos. Thailand is going to hold the annual Thailand Auto Part and Accessories in its capital city Bangkok in April.

Vietnamese, Lao provinces seek to boost cross-border tradeNhan Dan 13th Mar 2018
Building common standards to ensure transparence of procedures and costs at the border gates along the East-West Economic Corridor and guide books on taxation in agricultural production and cross-border investment and business were on the table at the event, which was jointly held by Quang Tri and Savannakhet provinces, and the Mekong Institute.

Economics

Energy, mines growth boosting Lao gov't revenuesXinhua 30th Mar 2018
VIENTIANE, March 30 (Xinhua) -- The Lao government has assured that the country will earn increased revenues from the energy and mines in 2018 on the back of the sector's continued growth. Laos currently has 53 hydropower plants with installed capacity of 7,082 MW that are able to generate 37,028 million kWh of electricity a year. "Another 47 plants are under construction or about to start construction and all are expected to be functioning in 2020 to 2021. Then the country will comprise 100 hydropower plants with an installed capacity of 13,062 MW and be able to generate 66,944 million kWh a year," local Vientiane Times on Friday quoted Minister of Energy and Mines Khammany Inthirath as saying.

Achievements Made Last Year With Revenues Rising, Spending Limited; Growth Enjoys Good Pace In Q1, 2018KPL: Lao News Agency 26th Mar 2018
(KPL) The government has made several achievements in implementing its socio-economic development as peace and order and political stability continued to be maintained, economic growth was recorded at 6.9% last year, according to Government Spokesperson Chaleun Yiapaoher. Revenue collection reached 22,676 billion kip, equal to 94.72% of the target planned for 2017. meanwhile, the government’s spending reached 30,667 billion kip, representing 94.65 % of planned spending.

Planning authorities roll out SDG support in four provincesVientiane Times 22nd Mar 2018
The Department of Planning under the Ministry of Planning and Investment has continued to provide facilities for four provinces in reaching the Sustainable Development Goals (SDGs) aligned to the 8th National Socio-Economic Development Plan. The department held a meeting on Tuesday to support the implementation of the Local Development Programme in the provinces of Bokeo, Borikhamxay, Khammuan and Vientiane, which is running from 2017-2021 and supported by the government of Luxembourg with 23 million Euros.

IMF Executive Board: Lao Economy Continues to Perform WellThe Laotian Times 15th Mar 2018
The Executive Board of the International Monetary Fund (IMF) recently gave a favorable analysis of the Lao economy: Lao P.D.R.’s economy continues to perform well, supported by a favorable external environment and strong flows of foreign direct investment from its dynamic neighbors. Growth in 2017 was supported by the expansion of electricity exports, construction activity and financial services, but moderated to 6.8 percent as a result of the prohibition on illegal logging, tighter credit conditions and fewer tourist arrivals. Inflation remained low at 0.2 percent in December 2017, reflecting a stable exchange rate and a decline in food prices.

Energy

Lao gov't promotes investment in potential projects Xinhua 22nd Mar 2018
The Lao government has compiled a list of potential development projects to attract domestic and foreign investment, local state-run daily Vientiane Times reported on Monday. According to the list, local and foreign investors are invited with 27 projects in six provinces out of the country's 18 provinces or cities. The Lao government will provide tax breaks and non-tax incentives as part of efforts to attract private investment in these projects, said the daily. The Lao government hopes the provision of relevant information to business people will help to diversify the country's economic base. Most business operators in Laos are interested in mining and hydropower as the country has plenty of these natural resources. According to data from the ministry, most investment is ploughed into electricity generation and mining. From 2011 to 2015, accumulated investment funding in the energy and mining sectors was about 3 billion U.S. dollars and 2.5 billion U.S. dollars respectively.

Thailand’s Delay on Buying Lao Dam Electricity Could Trigger RethinkRadio Free Asia 16th Mar 2018
Thailand’s national electricity authority has decided to delay a decision to purchase power to be produced by a controversial Mekong River hydropower dam. The Electricity Generating Authority of Thailand (EGAT) said in mid-February that it has delayed a decision to purchase power produced by the Pak Beng Dam in Laos until an ongoing review of the country’s power development plan can be completed. While that may sound like a technicality, it’s being interpreted by analysts as a sign that, along with other issues involved, the Thai government has been listening to concerns about the dam expressed by local Thai communities and by civil society groups.

Food & Agriculture

Agro-Forestry GDP Reaches 22 Trillion KIPKPL: Lao News Agency 5th Apr 2018
(KPL) The gross domestic product (GDP) of the agriculture and forestry sector reached 22 trillion kip, rising by 2.8 % year on year and representing 16.3% of the total GDP of the country, said on Monday Minister of Agriculture and Forestry Lien Thikeo. The GDP of the sector has rised slowly over the past five years, by 46 %, from 15 trillion kip in 2012 to 22 trillion kip last year.

Laos Banana Exports No Longer Pick of the BunchThe Laotian Times 15th Mar 2018
China has slapped inspection measures upon banana exports from Laos, hindering what was a booming trade. While Laos is still the second largest exporter of bananas to China, a protocol has been signed between Laos and China determining inspection and quarantine measures for bananas exported by Laos. Now, only bananas that meet strict criteria will be given the green light for export to China. This is the first time export standards have been initiated between the two countries.

Increasing forest cover to 70 percent is achievable, minister saysVientiane Times 21st Mar 2018
Extending the country’s forest cover from the current 59 percent to 70 percent by 2020 is achievable because measures are in place in pursuit of this goal, the Minister of Agriculture and Forestry said this week. Dr Lien Thikeo made the comment at a press conference on Monday, when he announced that Laos would join Cambodia, Myanmar and China’s Guangxi Zhuang Autonomous Region in holding activities to mark this year’s World Wood Day, which falls on March 21 (today). “There is a possibility to increase forest cover to 70 percent as targeted,” the minister told local media. Forest areas, including degraded forests in many parts of the country, can be reforested naturally if they are protected against further encroachment.

Health & Life Sciences

Blood Donation Remains Highly NeededKPL: Lao News Agency 4th Apr 2018
(KPL) People are highly encouraged to give blood to ease rising blood demand for medical purposes in the Lao society. A blood drive was held at Vientiane Center in Vientiane on Wednesday with an aim to celebrate the 3rd anniversary of the shopping centre. “Every year, we have an ambitious target to have around 60,000 people giving blood. However, in reality only 30,000 people give blood annually today,” said Mr Sing Manolath, Vice President of Lao Red Cross.

Over 5,200 U-5 Children in Pakading To Be VaccinatedKPL: Lao News Agency 3rd Apr 2018
(KPL) More than 5,200 under 5 children in Pakading district, Borikhamxay Province will be vaccinated under the National Immunization Programme, supported by the United Nations Children Fund (UNICEF) and the World Health Organisation (WHO). A team comprising officials from UNICEF and WHO, and media practitioners visited Thongnamy village, Pakading District, Borikhamxay Province on April 2 to observe vaccination there. Vaccination will be conducted for target groups of children at health centres, as well as district and provincial hospitals, kindergartens, markets and bus stations between Mar 26 and Apr 4.

Subnational Polio Vaccination To Target 460,000 U-5 Children In LaosKPL: Lao News Agency 26th Mar 2018
(KPL) The National Immunization Programme (NIP) under the leadership of the Ministry of Health (MoH), with the support of UNICEF and WHO, will launch on Monday, 26 March, a 10-day subnational polio vaccination campaign in 13 provinces and 90 districts to vaccinate about 460,000 children aged 0 month to 5 years of age. More than 7,200 volunteers and 1,400 health workers will ensure that all children within the 0 to 5 age group in the selected provinces and districts receive the two drops of oral polio vaccine.

Laos, China sign agreement on building Lao hospitalXinhua 9th Mar 2018
Laos and China on Friday held a signing ceremony for an agreement on the implementation of the China-aided Mahosot hospital project here. Economic and commercial counselor of Chinese embassy in Laos Wang Qihui and General Director of the Office of Lao Health Ministry Nao Boutta signed the agreement on behalf of the Chinese and Lao governments, respectively. "I hope this project will help the Lao government offer the modernized medical service to the people, so that it will not be necessary for the Lao people to be treated in neighboring countries," Deputy Health Minister Phouthone Meuangpak said at the ceremony.

ICT

Laos plans to develop e-commerceXinhua 9th Mar 2018
VIENTIANE, March 9 (Xinhua) -- The Lao Ministry of Post and Telecommunications has named the development of e-commerce as one of its core strategic goals over the next 10 years. According to the long-term development plan, which has been posted on the ministry's website, Laos will complete the construction of essential Information and Communications Technology (ICT) infrastructure and draw up legal documents to support e-ecommerce by 2025.

Infrastructure

Laos steps up cooperation with GMS countries for rail connectivityVientiane Times 26th Mar 2018
Laos continues to look forward to cooperating with neighbouring countries for sustainable railway connectivity in the Greater Mekong Subregion (GMS) while pursuing its dream to transform the country from landlocked to land-linked. Director General of the Planning and Cooperation Department under the Ministry of Public Works and Transport, Mr Sengdarith Kattignasack, made the comment last week during the GMS Association Board of Directors General Meeting in Vientiane. He added that the government’s policy was to transform the country into a transit transport service provider within the region, through land links.

Plans on track for commercial development at Khonphapheng waterfallVientiane Times 26th Mar 2018
Preparations for a vast development around one of Laos’ most stunning sights – the Khonphapheng waterfall on the Mekong River in Champassak province – are going ahead as planned. The massive cascade is the largest in South-East Asia and lies about 80km from the provincial capital Pakxe, not far from the Cambodian border. It is a popular tourist attraction. Now provincial authorities and a Chinese company are setting up the Khonphapheng Special Economic Zone (SEZ) and officials are discussing various issues with the Chinese firm to find common ground before a concession agreement can be signed.

Xayaboury-Luang Prabang road upgrade over 70 percent completeVientiane Times 26th Mar 2018
The upgrade of National Road No. 4B running from Hongsa district in Xayaboury province to Chomphet district in Luang Prabang province is currently more than 70 percent complete and is on track to be finished at the end of this year. Project head for the first section of the upgrade, Mr Sengchan Khongsavan, told Vientiane Times last week that work was taking place over a total distance of 114km. The upgrade is taking place over two sections and he was in charge of the first section of 42km from Napong village to Phousamphan mountain in Hongsa district.

RoK injects 6 million USD into mapping project in LaosVietnam Plus 14th Mar 2018
The Republic of Korea has granted more than 49.7 billion kip (6 million USD) through the Korea International Cooperation Agency (KOICA) to finance a project that will strengthen geospatial data in the Lao province of Savannakhet. The Project for the Establishment of Geospatial Data Infrastructure and Capacity Building for Developing Special Economic Zone in Savannakhet province aims to create a large-scale digital topographic map for use in socio-economic development in the province,It will also support the government’s socio-economic development plan, especially the development of infrastructure including roads, electricity, water supply, and urban planning.